Global packaging and paper producer Mondi Group will pay out a 23.33 euro cents (R4.57) dividend for the six months to June, on top of the €1.60 per share special dividend arising from the proceeds from the sale of the group’s Russian assets.
The special dividend was accompanied by a share consolidation of 10 new shares for every 11 held. Including the consolidation, basic underlying earnings were 50.5 euro cents per share compared with 67 euro cents at the same time last year, prior to consolidation.
Group chief executive Andrew King said they had reported a “robust performance” in the first half, and although underlying Ebitda (earnings before interest tax depreciation and amortisation) of €565 million was lower than the same period last year, market conditions had improved, resulting in stronger order books and higher sales volumes.
“This enabled us to implement a number of price increases across our paper grades. Alongside lower input costs, we delivered a sequential improvement in underlying Ebitda when compared to the second half of 2023,” he said in a statement.
The second quarter underlying Ebitda benefited from rescheduled maintenance shuts and a higher than expected forestry fair value gain, together totalling about. €40m. The group was on track and on budget with its organic growth investments, enabling the declaration of dividends.
Input costs were lower in the second quarter. A number of price increases across paper grades were implemented in the first half.
King said the benefit of the price increases would continue into the second half of the year.
The second half was also expected to be impacted by higher planned maintenance shuts and a likely forestry fair value loss.
The impact of maintenance shuts had been lower than expected in the first half due to the rescheduling of the maintenance shut at Mondi’s Richards Bay mill from the second quarter to the third quarter.
The underlying Ebitda impact from shuts in the second half of the year was therefore expected to be around €80m compared to the around €20m impact in the first half.
“Of our €1.2 billion organic growth investments, we will have invested around 80% by the end of this year, with operations currently ramping up following the modernisation of our Kuopio mill, the de-bottlenecking of our Świecie mill and the two expanded box plants in Poland. Overall, our organic growth investments are expected to deliver a meaningful Ebitda contribution from 2025,” said King.
Cash generated from operations in the first half was €372m (€554m), which included an increase in working capital of €160m ((€37m)) in line with the improving market environment in the period.
Net debt at June 30 was €1.6bn, up from €419m at December 31, 2023, due to the ongoing investment in the business and the payment of dividends. Net debt at December 31, 2023 included proceeds received in 2023 from the disposal of the previously-owned Russian operations, which were distributed to shareholders in February.
At June 30, 2024, available liquidity stood at €1.2bn, comprising €754m of undrawn debt facilities and cash and its equivalents of €411m.
BUSINESS REPORT